Accounting question

[Gary Holtum]

>> Just trying to understand. If I get a gross amount of 1200 euro salary
for a certain month, pay 200 income tax then I earn a 1000 income: right? <<

Wrong! If your salary is 1200 then your income is 1200. The government bases
its tax rate on 1200, therefore you have an EXPENSE of 200.

Gary 

-----Original Message-----
From: gnucash-user
[mailto:gnucash-user-bounces+diamondhranchqh=earthlink.net at gnucash.org] On
Behalf Of Guus Bonnema
Sent: Monday, June 27, 2016 6:39 AM
To: gnucash-user at gnucash.org
Subject: Re: Accounting question


On 27-6-2016 11:01, Michael DeBusk wrote:
> On Jun 27, 2016 04:46, "Guus Bonnema" <gbonnema at xs4all.nl> wrote:
>
>> You wouldn't treat tax refunds as (delayed) income? As tax decreases
> income, tax refund increases income albeit delayed?
>
> I do not. Tax doesn't decrease income any more than any other expense 
> decreases income. Expenses decrease assets.

Just trying to understand. If I get a gross amount of 1200 euro salary for a
certain month, pay 200 income tax then I earn a 1000 income: 
right? Now, if by the end of the year, the goverments returns 50 euro tax
(for that month) then in retrospect I earned 1050.

I don't see what is wrong with that reasoning and it does imply that tax
decreases income, and tax return increases income .... ?

Why would the tax return not be delayed income?
>> P.S. I might be misunderstanding the term "a/r", taking it to mean 
>> you do
> not regard this as income.
>
> Accounts Receivable are asset accounts that track income you've earned 
> but have not received. Most individuals won't use them, as cash-based 
> accounting makes more sense for them; Accounts Receivable and Accounts 
> Payable are used in accrual accounting, which businesses tend to use.

Thanks for the explanation. For me indeed not usually important.

Kind regards, Guus.
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